TME (Tencent Music Entertainment Group) Operating Income: $1,412 Mil (TTM As of Mar. 2026)

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TME Tencent Music Entertainment Group TME
75 GF Score
Price $9.49
GF Value $15.42
Valuation Significantly Undervalued
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What is Tencent Music Entertainment Group Operating Income?

Tencent Music Entertainment Group TME -2.27% 75 Operating Income is $1,412 Mil as of Mar. 2026. GuruFocus rates TME with a GF Score™ of 75/100 and a GF Value™ of $15.42 (Significantly Undervalued).

Tencent Music Entertainment Group's Operating Income for the three months ended in Mar. 2026 was $339 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2026 was $1,412 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Tencent Music Entertainment Group's Operating Income for the three months ended in Mar. 2026 was $339 Mil. Tencent Music Entertainment Group's Revenue for the three months ended in Mar. 2026 was $1,146 Mil. Therefore, Tencent Music Entertainment Group's Operating Margin % for the quarter that ended in Mar. 2026 was 29.58%.

Good Sign:

Tencent Music Entertainment Group operating margin is expanding. Margin expansion is usually a good sign.

Tencent Music Entertainment Group's 5-Year average Growth Rate for Operating Margin % was 22.70% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Tencent Music Entertainment Group's annualized ROC % for the quarter that ended in Mar. 2026 was 10.88%. Tencent Music Entertainment Group's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2026 was 697.24%.

Tencent Music Entertainment Group  (NYSE:TME) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Tencent Music Entertainment Group's annualized ROC % for the quarter that ended in Mar. 2026 is calculated as:

ROC % (Q: Mar. 2026 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2025 ) + Invested Capital (Q: Mar. 2026 ))/ count )
=1355.176 * ( 1 - 17.62% )/( (10496.224 + 10027.423)/ 2 )
=1116.3939888/10261.8235
=10.88 %

where

Invested Capital(Q: Dec. 2025 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=14556.168 - 1522.887 - ( 3452.408 - max(0, 2071.36 - 4608.417+3452.408))
=10496.224

Invested Capital(Q: Mar. 2026 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=14487.747 - 1841.964 - ( 3880.24 - max(0, 2411.602 - 5029.962+3880.24))
=10027.423

Note: The Operating Income data used here is four times the quarterly (Mar. 2026) data.

2. Joel Greenblatt's definition of Return on Capital:

Tencent Music Entertainment Group's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2026 is calculated as:

ROC (Joel Greenblatt) %(Q: Mar. 2026 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Dec. 2025  Q: Mar. 2026
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=1532.188/( ( (211.268 + max(-1071.245, 0)) + (228.232 + max(-1245.775, 0)) )/ 2 )
=1532.188/( ( 211.268 + 228.232 )/ 2 )
=1532.188/219.75
=697.24 %

where Working Capital is:

Working Capital(Q: Dec. 2025 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(554.152 + 5.821 + 423.672) - (1522.887 + 532.002 + 0.0010000000002037)
=-1071.245

Working Capital(Q: Mar. 2026 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(554.983 + 6.964 + 587.775) - (1841.964 + 553.532 + 0.00099999999974898)
=-1245.775

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Mar. 2026) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Tencent Music Entertainment Group's Operating Margin % for the quarter that ended in Mar. 2026 is calculated as:

Operating Margin %=Operating Income (Q: Mar. 2026 )/Revenue (Q: Mar. 2026 )
=338.794/1145.514
=29.58 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Tencent Music Entertainment Group Operating Income Related Terms

Tencent Music Entertainment Group Operating Income Historical Data

* Premium members only.

The historical data trend for Tencent Music Entertainment Group's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Tencent Music Entertainment Group Operating Income Chart

Tencent Music Entertainment Group Annual Data
Trend Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24 Dec25
Operating Income
Get a 7-Day Free Trial Premium Member Only Premium Member Only 488.28 506.62 696.34 1,021.74 1,382.47

Tencent Music Entertainment Group Quarterly Data
Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24 Dec24 Mar25 Jun25 Sep25 Dec25 Mar26
Operating Income Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 289.55 361.12 332.84 379.66 338.79
TME
75GF Score
Tencent Music Entertainment Group TME
Operating Income is just one metric. See GF Score™, valuation, warning signs, and more.
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Tencent Music Entertainment Group Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Mar. 2026 adds up the quarterly data reported by the company within the most recent 12 months, which was $1,412 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Frequently Asked Questions Learn more about Operating Income →
What does a Operating Income of $1,412 Mil mean?
Tencent Music Entertainment Group (TME) has a Operating Income of $1,412 Mil as of Mar. 2026. Operating Income equals sales less all operating expenses. It is linked to EBIT. View historical data on Tencent Music Entertainment Group and its competitors.
Is Tencent Music Entertainment Group's Operating Income too high?
Tencent Music Entertainment Group's current Operating Income is $1,412 Mil. Overall, Tencent Music Entertainment Group has a GF Score™ of 75/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Tencent Music Entertainment Group's Operating Income compare to PINS and MTCH?
Tencent Music Entertainment Group's Operating Income of $1,412 Mil can be compared against companies in the Interactive Media industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Income for an Interactive Media company?
A good Operating Income depends on the Interactive Media industry context. However, Operating Income should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Income mean?
A high Operating Income can signal that a stock is expensive relative to its fundamentals. Operating Income equals sales less all operating expenses. It is linked to EBIT. View historical data on Tencent Music Entertainment Group and its competitors. Tencent Music Entertainment Group's current Operating Income is $1,412 Mil. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Tencent Music Entertainment Group stock overvalued right now?
Based on GuruFocus' analysis, Tencent Music Entertainment Group (TME) is currently considered Significantly Undervalued. The stock's GF Value™ is $15.42, compared to a current price of $9.49 — trading 38.5% below its estimated fair value. The current Operating Income is $1,412 Mil. Tencent Music Entertainment Group's overall GF Score™ is 75/100. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Income calculated?
Operating Income is calculated from a company's financial statements. For Tencent Music Entertainment Group (TME), the current Operating Income is $1,412 Mil as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

Is Tencent Music Entertainment Group (TME) Overvalued in 2026?

Based on GuruFocus' analysis, Tencent Music Entertainment Group stock appears to be undervalued. The current stock price of $9.49 is trading 38.5% below its estimated GF Value™ of $15.42. GuruFocus considers Tencent Music Entertainment Group to be Significantly Undervalued.

Key valuation signals for TME:

  • Operating Income: $1,412 Mil
  • GF Value™: $15.42 vs. price of $9.49 (38.5% below fair value)
  • GF Score™: 75/100

No single metric tells the full story. See the TME stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.

Tencent Music Entertainment Group Business Description

Address Kexing Science Park, Kejizhongsan Avenue, Unit 3, Building D, Hi-Tech Park, Nanshan District, Shenzhen, CHN, 518057
Tencent Music is the largest online music streaming platform in China, established in 2016 through the merger of QQ Music, Kuwo Music, and Kugou Music. Tencent, its largest shareholder, holds over 50% of the shares and more than 90% of the voting rights. Beyond streaming services, Tencent Music generates revenue through a diverse range of offerings, including podcasts, livestreaming, concerts, and karaoke.
75GF Score

Get the complete analysis for TME

Operating Income is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.

$9.49
Price
$15.42
GF Value